What Are the Three Precious Metals?
The three precious metals are gold, silver and platinum. Precious metals are used in art, industry and as money around the world. Investors use precious metals as a store of wealth to counteract losses due to inflation because they tend to retain their value. It's also possible to invest in precious metal stocks in lieu of physically storing gold, silver or platinum.
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Platinum
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Platinum was used in South America for a thousand years before it was discovered by Spanish explorers who introduced it to Europe. Platinum was originally sourced in Colombia but is now found in just two locations, South Africa and Siberia. Initial use was scientific and industrial, but Russia monetized platinum by producing coins in the 1800s. The Japanese were the first to offer platinum bullion to investors in the 1970s. Due to its rarity, platinum is the most valuable of all the precious metals.
Gold
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Gold is found on every continent and has been deemed valuable by every culture. In ancient Greece, gold was believed to be made up of sunlight and water. The 1800s were a time of a gold rush in the United States and South Africa that was responsible for mining up to 90 percent of the world's gold. Discoveries of large gold deposits in South America during the 1980s further increased world gold supply. Today, gold is primarily used in jewelry and industrial applications.
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Silver
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Silver was first mined in Turkey around 3000 B.C., and coins have been used as money for hundreds of years. Until 1964, the United States minted coins from silver, but the price of silver outpaced the face value of coins; today's silver coins are a mix of less valuable metals. Modern investors may either buy bullion bars or "junk silver," which consists of coins produced before 1964. The price of silver usually mirrors movements in the price of gold.
Industrial Uses
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Precious metals aren't just used as money; they also make up components of electrical and medical equipment. Platinum is used throughout industry in a variety of medical, computer and environmental applications. Platinum in catalytic converters reduces emissions from automobiles. Silver is utilized in photography and to make silverware. It's also an essential element in electrical appliances. Due to its conductive properties, gold is found in computers and most electronics.
Investing
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There are several schools of thought on investing in precious metals, as well as different investment strategies. The stock market offers precious metal funds, derivatives, accounts and certificates that allow investors to purchase precious metals without having to physically store them. Taking physical possession of precious metals, however, is the only way to guarantee an investment because stock market funds are subject to fraud, and bullion trading firms can go bankrupt. It's also possible to invest in precious metal mining companies.
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